Patents, Liberty and the Free Market: A case for the enforcement of intellectual property rights

A “patent troll” is defined by Wikipedia as “a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic, often with no intention to manufacture or market the product.” In other words, a “patent troll,” some might say, is someone who: put the time, resources and effort into inventing something; spent the time and money obtaining a patent for said invention; and subsequently insists on maintaining control over that invention by requiring that those who wish to benefit from it pay for the privilege. Outrageous, right? Actually, it’s not.

“The Congress shall have Power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”

Some might say that granting these kinds of monopolies to patent owners slows down innovation, rather than speeding it up. Those same individuals would probably also argue that patent owners who have no intention of producing or selling the products they have invented ought not to be able to require payment from those who wish to produce and sell it. The rebuttal to this kind of argument can be found in the fundamentals of liberty and free-market principles.

The essence of the rebuttal is as follows:

Whether an inventor of a product intends to produce it for society’s consumption is irrelevant. The idea that people are only entitled to their property to the extent that they use said property for a particular purpose stands in complete contradiction to the principles of liberty. Ask yourself: Should one who has paid for, but never played, a grand piano be made to relinquish his purchase to another, without compensation, who intends to play the instrument in the public square? I should think not.

The ability to have such an exclusive right to financially prosper from the fruits of your intellect is in itself a source of motivation to invent; and, in absence of this motivation, the brightest among us are less likely to expend the effort necessary to innovate.

Focusing on this second point: Adam Smith wisely wrote that man, “[b]y pursuing his own interest… frequently promotes that of the society more effectually than when he really intends to promote it.” Smith goes on to say that he has “never known much good done by those who affected to trade for the public good,” and that to do so “is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”

The key to Adam Smith’s quote is in the idea that when man acts in his own interest, he is “led by an invisible hand to promote an end which was no part of his intention.” The end in this case is, of course, progress.

Without the monopolies given to patent holders over their inventions, there would be a substantially smaller incentive (if any at all) to put in the time, effort, and resources that often go into developing a formula or product. After all, who would bother making the devices and components that do so much to improve the quality of life, if they would not be able to profit from licensing their patent? And, given that the only reasons a company would approach a patent owner with the intent to strike a licensing deal lie in the penalties for infringement, the case for strict enforcement of patent (and other intellectual property) rights is strong.

Like in any other aspect of economic life, producers are driven by the benefits they will derive from their production. Every diminishment of those benefits will bring with it a diminishment in their motivation to produce. Therefore, it seems to follow that if the demonization of the enforcement of intellectual property rights were to catch on, the brightest among us would be significantly less likely to invent in every case where the benefits of expending the effort do not overwhelmingly outweigh the costs.

At the end of the day, the point is that our Founding Fathers – lovers of liberty and property, and certainly in large part, supporters of the free market – provided for the exclusive rights of inventors to the fruits of their minds because, as they so wisely put it, it serves “To promote the Progress of Science and useful Arts.” This promotion, in turn, leads to progress; and that’s what it’s all about.

Ralf Mangual is a second-year law student at DePaul University’s College of Law and a former communications intern at The Heartland Institute. Prior to moving to Chicago for law school, Ralf worked on public relations and social media communications for the International Trademark Association in New York City. A Brooklyn, NY native, Ralf earned his B.A. from the City University of New York’s Baruch College where he also played NCAA varsity baseball. When he’s not studying law or talking politics, Ralf enjoys watching baseball, and taking his dog to the beach.

Thank you for you comment. I’d like to first point out that “patent troll” is defined in the piece as “a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic, often with no intention to manufacture or market the product.” No where in this piece does it say that a “patent troll” is the inventor of a particular product. The article instead says only that a “troll” merely enforces its patents (without going into how he/she came to acquire the rights to the particular patent being enforced). However, whether a patent troll did or did not “invent” the subject of the particular patent he is seeking to enforce is irrelevant to the actual argument being made in this piece – that allowing for the strict enforcement of patent rights incentivizes innovation and thus promotes the progress of science and the useful arts.

The ability to enforce ones rights in a patent is what leads a “troll” to purchase those rights from the original patent holder; and, the possibility of profiting from the sale of a patent – which would not exist without the ability to enforce the patent against all others but the rightful owner – serves as an incentive for the inventor to invent. Without the ability to strictly enforce these rights, “trolls” and all others would be less likely to purchase patent rights from an inventor, thus hurting the profit prospects for the original patent holder (which disincentivizes him/her from going through the trouble of inventing in the first place).

The criteria used by USPTO Examiners in granting patent rights is not at issue here, so I will not bother to address your point regarding whether some patents should have been granted in the first place. That is for the Legislature, Courts, and USPTO to determine.

It seems that your argument is really about the downsides of patent enforcement rights insofar as the threat of legal enforcement may induce companies to pay a “troll” off instead of dispute his/her infringement claim. However, I think that the technological advancements made in the last century do much more to support the idea that the benefits of allowing for the strict enforcement of patent rights greatly outweigh the costs.